Ratings Agency Standard & Poor's decided to downgrade Italy on Tuesday, cutting the rating to BBB from BBB+. According to S&P, this action reflects their view of the effects of further weakening growth on Italy's economic structure and resilience, and its impaired monetary transmission mechanism. S&P also left their outlook at negative, meaning there is at least one-in-three chance that the rating could be lowered again in 2013 or 2014.

The highlights today will be the FOMC Minutes and Bernanke’s Speech and until then I don’t see an awful lot to move things around. The 4 hour charts are showing some minor bullish divergence and we could see the odd bounce but the dailies continue to point lower and I suspect that the low 1.2700 area will soon be tested. In the meantime leave room for bounces as the 4 hour charts unwind. We will be adding to our shorts if we see a bounce into the 1.2850/1.2900 in the coming session. German CPI, US FOMC Minutes, Wholesale Inventories, Bernanke Speech Economic data highlights will include: German CPI, US FOMC Minutes, Wholesale Inventories, Bernanke Speechhttps://support.fxcc.com/email/technical/10072013/

Upwards scenario: EURUSD stabilized on the hourly chart however appreciation above the next resistance at 1.2805 (R1) might be a good catalyst for a recovery action towards to next targets at 1.2833 (R2) and 1.2862 (R3). Downwards scenario: Any downside fluctuations remains for now limited to the next support level at 1.2754 (S1), only clear break here would be a signal of possible market easing towards to next targets at 1.2727 (S2) and 1.2699 (S3) in potential.

Upwards scenario: Current price setup might suggest volatility increase in near term perspective. If the price get acceleration on the upside and manages to surpass our resistive measure at 1.4926 (R1), we would suggest next targets at 1.4972 (R2) and 1.5018 (R3). Downwards scenario: Yesterday session low provides an important supportive mark at 1.4813 (S1). Any penetration below this level would suggest next targets at 1.4767 (S2) and 1.4722 (S3) in potential.

Upwards scenario: Upside formation is limited now to the next resistive barrier at 100.76 (R1). Clearance here is required to provide a space for a move towards to next target at 101.02 (R2) and then final aim could be found at 101.29 (R3). Downwards scenario: Further downtrend formation might get acceleration below the support level at 100.15 (S1). Loss here would suggest next intraday target at 99.87 (S2) and any weakening below it would then be limited to final support at 99.63 (S3).